Articles Posted in Texas Supreme Court

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1/2 Price Checks Cashed (Half-Price) brought a suit in a Dallas County justice court asserting breach of contract on the basis of the obligation owed by the drawer of a check under Tex. Bus. & Com. 3.414 and requested attorney's fees. At issue was whether a holder of a dishonored check could recover attorney's fees under Texas Civil Practice and Remedies Code section 38.001(8) in an action against a check's drawer under section 3.414. The court held that Half-Price's section 3.414 claim was a suit on a contract to which section 38.001(a) applied and applying section 38.001(8) to the claim did not disrupt Article 3 of the Uniform Commercial Code's statutory scheme. Therefore, the court reversed the judgment and remanded for a determination of attorney's fees.

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The Court was asked to consider whether state law allows a sophisticated party in a commercial transaction, represented by counsel, with full knowledge of all the circumstances, without mistake or duress of any kind, to include in a contract a disclaimer, and later disavow that disclaimer as having been false at the time it was made. Petitioner Italian Cowboy Partners entered into a lease agreement with Respondents to open a new restaurant. Petitioners had been in the restaurant business for twenty-five years. The lease Petitioners signed contained a disclaimer against representations or promises with respect to the leased site. But Petitioners sued claiming Respondents misled them regarding the suitability of the chosen rental space for a new restaurant. The Court held that the lower court erred in granting Petitioners damages and attorneys fees based on its interpretation of the disclaimer in the lease, and remanded the case for an additional hearing.